Category: Tax Administration Act No. 28 of 2011

Section 168 (TAA) – Criteria for instalment payment agreement

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168.    Criteria for instalment payment agreement

 

A senior SARS official may enter into an instalment payment agreement only if-

 

(a)     the taxpayer suffers from a deficiency of assets or liquidity which is reasonably certain to be remedied in the future;

 

(b)     the taxpayer anticipates income or other receipts which can be used to satisfy the tax debt;

 

(c)     prospects of immediate collection activity are poor or uneconomical but are likely to improve in the future;

 

(d)     collection activity would be harsh in the particular case and the deferral or instalment agreement is unlikely to prejudice tax collection; or

 

(e)     the taxpayer provides the security as may be required by the official.

Section 179 (TAA) – Liability of third party appointed to satisfy tax debts

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179.    Liability of third party appointed to satisfy tax debts

(1)     A senior SARS official may authorise the issue of a notice to a person who holds or owes or will hold or owe any money, including a pension, salary, wage or other remuneration, for or to a taxpayer, requiring the person to pay the money to SARS in satisfaction of the taxpayer’s outstanding tax debt.

[Subsection (1) substituted by section 66 of Act 39 of 2013 effective on 1 October 2012 and section 57 of Act 23 of 2015 effective on 8 January 2016]

(2)     A person that is unable to comply with a requirement of the notice, must advise the senior SARS official of the reasons for the inability to comply within the period specified in the notice and the official may withdraw or amend the notice as is appropriate under the circumstances.

(3)     A person receiving the notice must pay the money in accordance with the notice and, if the person parts with the money contrary to the notice, the person is personally liable for the money.

(4)     SARS may, on request by a person affected by the notice, amend the notice to extend the period over which the amount must be paid to SARS, to allow the taxpayer to pay the basic living expenses of the taxpayer and his or her dependants.


(5)     SARS may only issue the notice referred to in subsection (1) after delivery to the tax debtor of a final demand for payment which must be delivered at the latest 10 business days before the issue of the notice, which demand must set out the recovery steps that SARS may take if the tax debt is not paid and the available debt relief mechanisms under this Act, including, in respect of recovery steps that may be taken under this section-

(a)     if the tax debtor is a natural person, that the tax debtor may within five business days of receiving the demand apply to SARS for a reduction of the amount to be paid to SARS under subsection (1), based on the basic living expenses of the tax debtor and his or her dependants; and

(b)     if the tax debtor is not a natural person, that the tax debtor may within five business days of receiving the demand apply to SARS for a reduction of the amount to be paid to SARS under subsection (1), based on serious financial hardship.

[Subsection (5) added by section 57 of Act 23 of 2015 effective on 8 January 2016]

(6)     SARS need not issue a final demand under subsection (5) if a senior SARS official is satisfied that to do so would prejudice the collection of the tax debt.

[Subsection (6) added by section 57 of Act 23 of 2015 effective on 8 January 2016]

Section 191 (TAA) – Refunds subject to set-off and deferral

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191.    Refunds subject to set-off and deferral

(1)     An amount refundable under section 190, including interest thereon under section 188(3)(a), must be treated as a payment by the taxpayer that is recorded in the taxpayer’s account under section 165, of an outstanding tax debt, if any, and any remaining amount must be set off against any outstanding debt under customs and excise legislation.

[Subsection (1) substituted by section 61 of Act 23 of 2015 and by section 39 of Act 33 of 2019]

(2)     Subsection (1) does not apply to a tax debt-

(a)     for which the period referred to in section 164(6) has not expired or suspension of payment under section 164 exists; or

(b)     in respect of which an instalment payment agreement under section 167 or a compromise agreement under section 204 applies.

(3)     An amount is not refundable if the amount is less than R100 or any other amount that the Commissioner may determine by public notice, but the amount must be carried forward in the taxpayer account.

Section 180 (TAA) – Liability of financial management for tax debts

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180.    Liability of financial management for tax debts

 

A person is personally liable for any outstanding tax debt of the taxpayer to the extent that the person’s negligence or fraud resulted in the failure to pay the tax debt if-

 

(a)     the person controls or is regularly involved in the management of the overall financial affairs of a taxpayer; and

 

(b)     a senior SARS official is satisfied that the person is or was negligent or fraudulent in respect of the payment of the tax debts of the taxpayer.

Section 181 (TAA) – Liability of shareholders for tax debts

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181.    Liability of shareholders for tax debts

 

(1)     This section applies where a company is wound up other than by means of an involuntary liquidation without having satisfied its outstanding tax debt, including its liability as a responsible third party, withholding agent, or a representative taxpayer, employer or vendor.

 

(2)     The persons who are shareholders of the company within one year prior to its winding up are jointly and severally liable to pay the tax debt to the extent that-

 

(a)     they receive assets of the company in their capacity as shareholders within one year prior to its winding-up; and

 

(b)     the tax debt existed at the time of the receipt of the assets or would have existed had the company complied with its obligations under a tax Act.

 

(3)     The liability of the shareholders is secondary to the liability of the company.

 

(4)     Persons who are liable for the tax debt of a company under this section may avail themselves of any rights against SARS as would have been available to the company.

 

(5)     This section does not apply-

 

(a)     in respect of a “listed company” within the meaning of the Income Tax Act; or

 

(b)     in respect of a shareholder of a company referred to in paragraph (a).

Section 169 (TAA) – Debt due to SARS

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169.    Debt due to SARS

 

(1)     An amount of tax due or payable in terms of a tax Act is a tax debt due to SARS for the benefit of the National Revenue Fund.

 

(2)     A tax debt is recoverable by SARS under this Chapter, and is recoverable from-

 

(a)     in the case of a representative taxpayer who is not personally liable under section 155, any assets belonging to the person represented which are in the representative taxpayer’s possession or under his or her management or control; or

 

(b)     in any other case, any assets of the taxpayer.

 

(3)     SARS is regarded as the creditor for the purposes of any recovery proceedings related to a tax debt.

 

(4)     SARS need not recover a tax debt under this Chapter if the amount thereof is less than R100 or any other amount that the Commissioner may determine by public notice, but the amount must be carried forward in the relevant taxpayer account.